DO NOT FORGET THE DEED

Title to local church property like any other property in most states is controlled by the language of a deed filed in governmental property records. But, as the years pass, church life cycles may include names changes as well as substantive changes in affiliations. Sometimes these changes should be reflected in an amended deed. Because institutional memory in a primarily volunteer organization like a church is not well preserved and change in circumstances and conditions is usually gradual disparity in ownership and governance documents can result.

In First Presbyterian Church of Magnolia v Presbytery of the Pines, 2020 Ark. App. 253, the trial court held that the quiet title action commenced by the local church against the denomination was not justiciable. The appellate court reversed and held the quiet title action, and any other properly raised claim, was justiciable if Neutral Principles of Law controlled the outcome. In a quiet title action, Neutral Principles of Law could make the case justiciable. The local church was formed and acquired its property in the mid-Twentieth Century when there were two denominational bodies. The local church was a member of the denominational body that did not have a property reversion clause in its Book of Order until thirty years after the formation of the local church. As a result, the property deed of the local church did not contain a reference to the reversionary clause. Later, the two denominational bodies merged leaving a single denominational organization. The surviving entity did have a reversionary clause in the surviving Book of Order. On remand, the trial court will be faced with a reversionary clause adopted after the fact and twice removed from the original property deed that did not contemplate either reversionary clause.

Some states may place a property deed on a part with denominational governance documents. Denominations may desire that local church property deeds reflect denominational interests. However, that may make mortgages problematic. Local churches must evaluate their denominational affiliation carefully and determine whether the state of residence of the local church would consider denominational governance documents controlling over local church property deeds.

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